It is currently trending on Facebook but if you have not heard the news already, reports indicate that Microsoft plans on laying off 700 employees next week, the first in a long string of layoffs to take place from now through June 2017 – 2,850 layoffs in total to be exact.
The company says the layoffs are coming for two reasons, 1.) the lack of popularity for the Windows phone has resulted in quarterly loses and 2.) the company wants to get back to their roots and become more of an “American based company” like it used to be in the past.
There is no doubt that the Windows phone has been a bit of a failure, this has been well documented by others and I do not want to get into a discussion about that here. What I want to discuss today is the fact that there is more to Microsoft’s decision than a few bad quarterly statements.
Earlier in 2016 I covered a story about Russia’s decision to pull out the US tech market, more specifically Russia’s decision to ditch Microsoft as the countries supplier of computers. This was an important development for Microsoft considering that the Government of Russia operates on over 600,000 Microsoft computers – estimates from Dmitry Peskov Russia’s Press Secretary.
Here is the thing though, it will not just be Russia who does this in the future. What does that mean? projecting the figures forwards, we are talking about millions to tens of millions of computers/computer systems that Microsoft used to sell on the international market, that Microsoft will no longer be selling – of course their quarterly statements are going to start going down.
Projecting this forwards, are you still confused why Microsoft is going to have to start letting some of their employees go in the future?
In response to the announcement that the company was going to start laying off employees, Microsoft CEO Satya Nadella went on to say “We’re a U.S.-based company that operates worldwide and our predominant employment is in the United States. We’ve already created a tremendous amount of high-paying jobs in the U.S. If anything, we’ll double down on what we’ve always done, which is be a U.S. company that operates in the United States very responsibly, but also being a multinational company that contributes into every country that we work in.”
There is no doubt some truth to his statement, in fact 64,00 of Microsoft’s 113,000 employees work inside the United States, but I also think the company is trying their hardest to spin the story and pass off their international failures in the name of US Patriotism.
Say what you will about Donald Trump, but ever since Trump won the nomination in November countless companies have stepped forward saying they will no longer build/produce overseas and have promised to create hundreds of thousands of new jobs inside the United States.
While I think it is great that Microsoft wants to bring back some jobs to the United States, I am not naive enough to think that are doing it because they are such strong US Patriots. Microsoft is literally being kicked out of foreign countries, by foreign governments, they are not leaving voluntarily.
Before you go and cry tears of sympathy for Microsoft, consider the following facts:
Bill Gates, the original founder of Microsoft, is literally THE richest man in the world and Microsoft the corporation is arguably THE most globally influential computer company in the world. Even though there are no monopoly laws in the international trade market like there are inside the USA, Microsoft has certainly had a global monopoly in this industry/market for quite some time now.
Even if it means Microsoft loses some money, is anyone really going to be sad if new computer companies start to develop/form/go into business ?
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